The Real Deal Miami

Industry leader sees Miami rent surge

Developer Harvey Hernandez predicts rents will soon rise by $1 per square foot

October 13, 2014 01:30PM

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Harvey Hernandez, managing director of Newgard Development Group.

Harvey Hernandez, managing director of Newgard Development Group.

Rents in Miami are set to soar, according to developer Harvey Hernandez, who is banking on $3,150 a month for a smallish two-bedroom apartment in downtown Miami becoming the new normal.

“We’re not going to have enough product to cover the demand,” Hernandez said, citing predictions for a population influx in the area. “I think we’re going to touch $3.50 a foot at least.”

Currently, rents range from about $2.25 to $2.50 per square foot, according to the Daily Business Review.

As a result, Hernandez suggested at an industry panel discussion sponsored by CBRE that developers start thinking smaller. A 900-square-foot, two-bedroom would be a good size going forward, Hernandez said.

Hernandez is in charge of two large projects under construction: the 37-story loft-style Centro tower in downtown Miami and the 46-story BrickellHouse in the financial district. [Daily Business Review] – Christopher Cameron

  • jake

    No there is already too many rentals planned… you have to remember that all these new condos going up will be rented out and since the owners pay in cash they are looking to store their money with either zero or next to nothing cap rates. That means the rental rates don’t make sense for a normal investor. Therefore the rates will not be what Harvey says.

  • susan

    Does Harvey live in a 900sqft condo? Most likely not. I like how all these people think they know what people want but at the end of the day they are looking at the bottom dollar in their pocket and not for the actual buyer

  • sean

    Why do all these developers think they know what the market is going to be, these are the same developers who messed up the South Florida market, the same developers with wrong predictions and think that if they put a news article out on a prediction it will help sales for their pre construction buildings. I am sorry but developers lost all clout in my book from their greed and mistakes. including related, fortune i dont care anymore, they dont know zip about what the people want and what will be the future of the city, because if you look at plain economics, nothing they are doing is making sense.

  • Rafael

    I don’t know why the media only writes articles of the condo boom in Miami being a positive thing. The frenzy is being created by foreign investors who are paying too much for these overprices condos. What they should also report is the economic news coming from foreign markets. This is turning into a great bubble once again. The majority of residents in Miami are not able to affortd these condos, so who are we really buildling for?

  • Eric

    The Miami market will need an influx of around 50,000 people, working and paying top dollars in rent for those units to be rented and absorbed. It’s not going to happen at least not in the next few years. Many of those units will remain empty, HOAs dues and real estate taxes won’t be paid and foreclosures will happen again. Until there is a real economy beside tourism in South Florida, the real estate market will only be dependent on funds coming from abroad.

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